Investing.com UK - Financial Markets Worldwide
Get 40% Off
Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolios

Market Brief: Treading Water Ahead Of ISM Services PMI

ByCity Index
AuthorMatt Simpson
Published 03/10/2019, 08:02
USD/JPY
-
AXJO
-
DE40
-
JP225
-
WMB
-
Daily % Candles

FX Brief:

  • Ahead of trade talks, White House advisor Peter Navarro has listed “seven deadly sins” from China; Cyber attacking, IP theft, forced technology transfer, goods trade balance, China state-owned subsidies, FX manipulation, and fentanyl shipped to “kill countless Americans.”

    The US is to hit Europe with a 10% tariff on European-made Airbus plan and 25% on French wine, Scotch and Irish Whiskey and continental cheese.

  • Fed Williams (NYSE:WMB) sees monetary policy as “in the right place,” although the outlook for the economy is mixed. On tariffs, he sees risks to the economy as relatively modest.

  • Australian exports fell -3% in September and weighed on their surplus. It still touched a marginal 2-day high following yesterday’s bullish Doji at multi-year lows.

  • Minor ranges overall, AUD is the most influential major, elsewhere majors remain in low-ranging holding patterns.
    • Asian Cash Indices % Change

    Equity Brief:

  • Asian stock markets have continued to see further downside, taking the cue from another bloodbath seen overnight in the U.S. stock markets. Also, the U.S. benchmark stock index, S&P 500 has seen it's first back to the backdrop of more than 1% in 2019. South Korea’s Kospi 200 has managed to “escape” the bleeding as it is stock exchange is closed today for a public holiday.

  • One of the worst performers as at today’s Asian mid-session is Japan’s Nikkei 225. It shed 2.20% in line with a stronger JPY where the USD/JPY hit a 3-day low of 107.00. Also, the latest data on Japan’s services sector for Sep has indicated a slow-down in growth over Aug where the Jibun Bank Japan Services PMI dropped to 52.8 from 53.3 seen in August.

  • The slowdown in growth seen in Japan’s services sector, the main driving force so far to maintain a positive economic growth to offset the negative impact from a 9-month export slump is a concern to market participants. The government has just imposed an increase in sales tax to 10% from 8% that came into effect on 01 Oct which can lead to a slowdown in future domestic consumption where the services sector is dependent on.

  • Australia’s ASX 200 also sees the further downside as it tumbled by -2.23% to print a 4-week low of 6475 led by technology and energy stocks that have declined by -2.50% and -3.02% respectively.

  • Adding salt to the on-going negative sentiment, the U.S. administration has decided to hike tariffs on European produces; 10% tariffs on European aircraft and 25% duties on other goods such as wines and cheese as punishment for illegal EU aircraft subsidies.

  • After a 2-day decline of 3.5% in the S&P 500 to print a low of 2875 seen yesterday, the S&P 500 E-Mini futures have traded sideways in a tight range of 9 points so far in today’s Asian session.

    • Up Next

  • Final PMI reads for France, Germany and the Eurozone are released early in the European session. Significant revisions aren’t expected, but if they are lowered, it simply feeds into the negative sentiment regarding global growth, Keeps Euro crosses and DAX on your radar.

  • However, the highlight could be ISM’s non-manufacturing PMI for the US. Given we saw the ISM manufacturing tank to a 10-year low this week, Non-manufacturing (NM PMI) could receive extra scrutiny. Although NM PMI has remained expansive since the GFC, a slower rate of expansion points towards a broader slowdown and could exacerbate risk-ff sentiment if it slows enough later today. Therefore a weak print could weigh on USD and US indices.
    • Economic Calendar

    "Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation concerning the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation, and needs of any particular recipient.

    Any references to historical price movements or levels are informational based on our analysis, and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions."

    Original Post

    3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

    Latest comments

    Install Our App
    Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
    Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
    Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
    It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
    Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
    © 2007-2024 - Fusion Media Limited. All Rights Reserved.